Request By:
Mr. C. D. "Dave" Countin
Director of Development
Kentucky Credit Union League, Inc.
3615 Newburg Road
Louisville, Kentucky 40218
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Robert L. Chenoweth, Assistant Deputy Attorney General and Chief Counsel
This is in response to your request for an opinion concerning the constitutionality of KRS 290.295, which provides as follows:
"Any credit union may, with the approval of the Commissioner, merge with any other credit union chartered by this Commonwealth and located in the capital city of the Commonwealth of Kentucky and operated solely for the benefit of the employees of the Commonwealth of Kentucky. Such merger shall be approved by the credit union to be merged/absorbed, and the continuing credit union, pursuant to the provisions set forth in KRS Chapter 271."
Specifically, you and your counsel perceive the statute as special or local legislation prohibited by Sections 2, 3, 59 and 60 of the Kentucky Constitution, as well as the equal protection clause of the Fourteenth Amendment of the United States Constitution. The effect of the statute is to permit credit unions consisting of state employees to merge under the provisions of KRS Chapter 271A which only requires the affirmative vote of a majority of the shareholders of each such credit union desiring to merge. See KRS 271A.365. KRS Chapter 290 does not provide a mechanism for any other types of credit unions to merge; therefore, the only manner in which the members can effectively unite their credit unions is by dissolution under KRS 290.290, a prerequisite of which is a fourfifths affirmative vote of the shareholders. The difference in the procedures is the percentage vote of the shareholders required to accomplish the combination of the credit unions. It is the formal opinion of the Office of the Attorney General that KRS 290.295 abridges no constitutionally protected rights nor is it inconsistent with any provision of the state or federal constitutions.
As you suggested several sections of the Kentucky Constitution are relevant to our consideration of the question you have presented. Section 2 of the Kentucky Constitution forbids arbitrary actions. The Kentucky Court of Appeals in Pritchett v. Marshall, 375 S.W.2d 253 (1963) determined that this section was "broad enough to embrace both due process and equal protection of the laws, both fundamental fairness and impartiality." Section 3 of the Kentucky Constitution forbids the grant of "exclusive, separate public emoluments or privileges . . . except in consideration of public services . . ." Sections 59 and 60 of the Kentucky Constitution prohibit special or local legislation.
The key to the constitutionality or not of KRS 290.295 rests, we believe, in a determination as to whether there is a natural and reasonable distinction between credit unions for state employees and all other credit unions in the state. Different classifications for, treatment of and benefits to employees and workers are not uncommon and have been reviewed by our Kentucky appellate courts. The Court of Appeals in Commonwealth ex rel. Hancock v. Davis, determined that Sections 2, 59 and 60 of the Kentucky Constitution and the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution were not violated by a law providing for a higher maximum salary for commonwealth attorneys of first and second class cities than attorneys of other cities. The new Court of Appeals concluded in Fitzpatrick v. Crestfield Farm, Inc., Ky. App. 582 S.W.2d 44 (1978) that the agriculture exclusion in the Workmen's Compensation Act was not a violation of the Equal Protection Clauses of the state and federal constitutions. The Supreme Court of Kentucky recently in Jefferson County Police Merit Bd. v. Bilyeu, 634 S.W.2d 414 (1982) stated, with regard to Sections 59 and 60 of the Kentucky Constitution, that there existed a strong presumption of constitutionality afforded to an enactment of the General Assembly when considered against these two sections.
We believe KRS 290.295 is based upon a natural and reasonable distinction. In this statute, the General Assembly has conferred a form of benefit to state government employees in recognization of services rendered just as it has for them in such areas as pensions, insurance, merit system protection and etc. Credit union membership of any form, by itself, primarily rests upon defined group distinctions. KRS 290.295 simply and reasonably addresses credit unions for employees of the state as a separate group as compared to other affiliated group employees. Given the unique relationship of the General Assembly to state employees, we can see no arbitrary, unreasonable or unlawful discrimination between state employees credit unions and all others.
For the reasons stated above, and in view of the strong presumption of constitutionality of a statute, as reminded in Jefferson County Police Merit Bd. v. Bilyeu, supra, and that a construction of a statute which threatens unconstitutionality should be rejected, George v. Scent, 346 S.W.2d 784 (1961), we are of the opinion KRS 290.295 is constitutional.